Global Warming Hearing on Oil Profits and Subsidies

The Select Committee on Energy Independence and Global Warming is currently holding a hearing, "Drilling for Answers on Oil and Gas Prices, Profits, and Alternatives." Top-level executives from the five largest oil companies will discuss the current state of oil and gas prices, oil company profits, and the need for clean, renewable fuels to ease demand for oil and cut global warming pollution. The Select Committee will hear from the number two officers worldwide for the three United States-based oil companies and the presidents of U.S. operations for the foreign companies. ExxonMobil reported record profits of $40.6 billion in 2007, and the other top four oil companies like BP and Shell made billions more. These same companies are fighting to keep $18 billion in tax breaks that Congress is attempting to shift towards renewable energy incentives for wind, solar, biomass and other climate-friendly sources. The House recently passed the Renewable Energy and Energy Conservation Tax Act of 2008, but President Bush and the top oil companies are fighting to defeat the measure in the Senate.

Watch the hearing live via committee webcast or on C Span 3.

Chairman Ed Markey gives opening remarks:

Chairman Markey: "With gas prices at $3.29 per gallon, the poorest 20 percent of American households are spending nearly 10 percent of their income just on gasoline. American consumers also know that the major oil companies are reaping a major financial windfall. Big Oil's profits have more than quadrupled over the last six years. Just last year alone, Exxon Mobil recorded more than $40 billion in profit -- the greatest corporate profit in history -- and the five companies sitting before us today netted a combined $123 billion. And what is the oil industry doing with all this profit? Unfortunately, it goes as much to financial engineering as to renewable engineering. Last year, the five largest oil companies spent more than $50 billion on schemes to prop up the price of their stock."

Rep. Jay Inslee (WA-01) gives opening remarks:

Rep. Inslee: "Americans cannot understand, when they're paying $3.28 or $3.44 out in my state of Washington at the pump, why you then reach into their pockets and take out another $18 billion on April 15 out of the tax bill, they can't understand that. And when they asked to give you hell, I think that's one of the reasons. Because Americans believe, and I think rightfully so, if you were going to give awards for taxpayer abuses then this would win the Heisman, and the Oscar, and the Nobel Prize, to reach into Americans pockets at tax time to take this when these prices are going up like this."

Chairman Ed Markey questions the executives:

Chairman Markey: "Mr. Simon, last year Exxon Mobil reported $40 billion dollars in profits, $28 billion dollars in stock buybacks, $7.5 billion in dividends and executive compensation. But all I can really find is no more than a commitment of $100 million dollars in investment in renewables over the next 10 years. Why is that, Mr. Simon? Why is your company not investing in renewables?"

Rep. Jay Inslee (WA-01) questions the executives:

Rep. Inslee: "Did you or any of your associates participate in the secret, Vice President Cheney Energy Task Force in 2001?" ... Robert Mallone, BP: "Yes." Rep. Inslee: "And would you, Mr. Mallone, make your documents related to that secret meeting available to the committee?" Robert Mallone, BP: "Yes, sir." Rep. Inslee: "Thank you, we will make that request..."

Rep. Hilda Solis (CA-32) questions the executives:

Rep. Solis: "But then how do you explain your record profits that are well over one billion, can't those be redirected some way or apportioned?" Hofmeister, Shell: "The profits are cumulative around the world, but in the case of the Gulf of Mexico, we're limited by the amount of manpower that we have, we don't have the kind of human resource that can do all the leases simultaneously." Rep. Solis: "So the obstacle isn't from the Federal government, it's a market obstacle, it's your obstacle."